AT&T top buyer at U.S. airwaves auction; Verizon, Dish spend big

(REUTERS) — AT&T Inc spent close to half the total in the record-setting U.S. sale of airwaves for mobile data, with Verizon Communications Inc and bidding partners of Dish Network Corp also spending heavily, results showed on Friday.

AT&T T bid a total of $18.2 billion to win licenses of so-called AWS-3 spectrum; Verizon VZ bid $10.4 billion and T-Mobile US Inc TMUS bid $1.8 billion, according to the results released by the Federal Communications Commission.

The record $44.9 billion auction, which ended on Thursday, demonstrated the voracious appetite of wireless carriers and other companies for spectrum, which has become a prized commodity as companies race to satisfy the growing consumer demand to stream video and other data-guzzling content.

Dish DISH itself did not win any licenses, but it had joint bidding agreements with SNR Wireless LicenseCo LLC and Northstar Wireless LLC, in which it has indirect ownership interests. Those two companies bid a total of $13.3 billion, but had applied to receive a discount as small-business entities, bringing their net bid amount to $10 billion.

As biggest bidders, AT&T, Dish’s partners and Verizon snapped up airwaves in some of the most coveted and expensive markets, such as New York and California.

Dish’s bidding significantly exceeded expectations, said MoffettNathanson analyst Craig Moffett, adding that it put a damper on the investors’ hypothesis that the satellite company had expected to turn around and sell the newly acquired airwaves to Verizon or another buyer.

Dish’s shares fell 1.2 percent in afternoon trading, to $72.57.

Verizon and AT&T bid less than what some analysts had estimated. Verizon shares were relatively unchanged at $46.42 and AT&T shares were up 1.2 percent at $33.36.

Dish acknowledged in a statement it had invested in two entities that participated in the auction but did not further explain its plans, citing FCC anti-collusion rules.

Verizon said in a statement it bought a total of 181 licenses that cover markets reaching 61 percent of the United States. AT&T was awarded 251 licenses, while T-Mobile bagged 151 licenses.

AT&T’s debt leverage may rise given its AWS-3 spectrum investment, it said in a statement.

“The company will use excess cash – after paying its dividend – over the next three years to pay down debt, and expects to return to historical debt ratios,” it added.

FCC spectrum auction raises over $30 billion in battle for airwaves

Companies have bid more than $30 billion to get a slice of the mid-range frequency spectrum auctioned off by the Federal Communications Commission last week.

The FCC offered what is called AWS-3 frequencies, which are a mid-range spectrum similar to those controlled by Dish Networks DISH. Auction 97, as it’s called, kicked off Nov. 13. It’s one of the first to offer that type of frequency and one of the biggest sales of new frequencies since 2008.

Pre-sale estimates put the value of the airwaves at $10.1 billion, but interest from companies pushed the bidding well over that value. The final and winners won’t be revealed until the auction ends and the FCC awards certain frequencies.

Certain airwaves are more valuable than others. A New York City block of frequencies sold for a reported $1.19 billion.

The spectrum is a valuable commodity because it allows wireless companies to add more capacity for cellular data and other wireless services. New frequencies, which may only be bought through an FCC auction, have been in short supply until now and companies are battling to get a slice to be able to increase their services and speed.

Dish, America Movil, T-Mobile US TMUS and AT&T T are all said to be participating in the bidding.